While I've heard several industry insiders complain how
decisions in major records labels are increasingly made by
MBAs rather than those who understand & work with music
daily, it seems those MBAs could use a stint of reeducation at
the undergraduate level. At least, that was my impression as
top business undergraduates challenged by USC's Marshall
School of Business to solve the music industry's digital
dilemma answered with the obvious: provide a better product
more quickly and efficiently than your competitor that's
also differentiated and provides added-value.

I'd like to add a contribution to the near-unanimous
no-brainer by the "eighty business undergraduates
representing 20 top schools from 13 countries and four
continents" that "media publishers needed to break with
traditional business models, embrace the new technologies
and recognize that consumers want to customize the content
they access." I believe that a key business strategy,
especially for incumbents, in an increasingly growing &
competitive marketplace characterized by technological
change needs to be the creation of barriers to entry. A
barrier to entry is either the leveraging of existing assets
or investment in new assets that make it costly for
competitors to enter and compete in a market. For the music
industry, that barrier has traditionally been control over
vast catalogues of works. In fact, the entire rational
behind mega media mergers as well as copyright extension has
been to clobber together and control ever-larger shares of
the world's creative media, making it difficult for any new
entrant to establish a beach-head in the market (but that's
another topic).

P2P therefore attacks the music industry's core asset by
making them widely and cheaply available, all under one roof
- an alternative to the traditional barrier to entry has
been created. And while providing an easier, more
feature-rich and reliable delivery method may help stem the
tide in favor of p2p systems, it is not clear that the
industry can continually retain that advantage over those
systems, nor that consumers' willingness to pay for a better
service is likely to provide the same type of returns on actual
control over their catalogues did. What the industry needs
is a new barrier to entry and I would propose that they do
have one in the creators themselves.

This is a theme that has been picked up in the video
industry which, despite Jack Valenti, tends to always be
ahead of the curve. We've been told that Blockbuster's
latest angst can be traced to consumers' increasing
preference to own versus rent DVDs. Considering that DVDs
are not significantly cheaper than VHS tapes were, I would
posit that the reason is that the DVD not longer offers
viewers simply the movie, but a story of which the movie is
only one piece. There is also the making of the movie, the
director's vision, behind-the-scene takes,... almost
anything that can connect the viewer with the movie from a
set of entirely different perspectives. Ironically this also
means tapping into an otherwise silent asset: the people
involved in the creation of the work. Directors, actors,
special-effect experts, make-up specialist, music
director,... they all get a shot.

It is at least in part by replicating the DVD model that the
music industry can begin to rebuild its barrier to entry and
effectively compete with P2P.